Fear and Greed

What do you think really drives financial markets ?? Man's most primal instincts - Fear and Greed.

I was watching TV the other day and this analyst came up with a very witty explanation for the current financial crisis. It was something like this:

The reason we are in this position now is because of too much greed and too less fear. The reason we are not able to get out of this situation is because of too much of fear and too less of greed.

I think that's very nicely put. There are quite a few who have tried to explore and understand the qualitative aspect of the functioning of financial markets. The social influence that is inevitably brought on my the involvement of humans is undeniable. Try reading "Theory of Reflexivity" by George Soros. The man is a genius, in every sense of the word.

There is a point where rationality is thrown out the window and "sentiments" rule the game. It's not who you are, it's what people think you are. That doesn't stop with people, it true for anything and everything.

Doesn't matter what you think, if Warren Buffet says something markets will plunge or rise. The Finance Minister or the Prime Minister come out with a statement and immediately the market recovers. So what, the fundamentals have all of a sudden changed because some politician has something to say.

How can the Finance Minister say that "investor confidence" has returned ??

How the fuck would he know ??

He hasn't slogged all year long, saved by cutting corners, invested the savings in the stock market and lived to see his life savings be flushed down the god damn toilet.

He has every right to try and convince the world that India is still a hot investment destination. He has every right to say that Indian banks are not in any trouble. He has every right to claim that the Indian economy is insulated from the global recession. Do you see the irony here ?? It's a GLOBAL RECESSION but India is insulated.

He can say whatever he wants about the economy but he has no right to comment on investor confidence.

I can see that I have successfully deviated from where I started. I shall not burden you with my rants any more.

Rest easy.